The Bar Business Podcast: Smart Hospitality & Marketing Secrets For Bar & Pub Owners

The Bar Tech Trap: How to Pick the Best Bar Technology for Real ROI

• Chris Schneider, The Bar Business Coach • Season 3 • Episode 153

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Feel like every tech company is trying to sell you the next “must-have” tool for your bar? 

You’re not crazy, and half of them don’t even understand how bars actually work. 

In this episode, we’re talking about why most bar tech ends up wasting your time and money and how to figure out what’s actually worth the investment. 

📌  What You’ll Learn 📌  

🌟Why bar tech drains profits before you even notice.
🌟The one metric that shows if tech is worth it.
🌟How flashy features create more work, not less.
🌟Why Excel might beat your $500/month tool.
🌟A smarter way to price out any bar tech.
🌟What vendors push that bar owners don’t need.
🌟How to trial tech without wasting money. 

You’ll walk away with a super practical framework to evaluate tech before you buy, and hear which simple tools usually deliver the best ROI. 

If you’re tired of shiny object syndrome and want tech that actually helps your bottom line, this one's for you. 

🔴 Learn More: 🔴

📌 Want a personalized bar growth plan?
Book your FREE STRATEGY SESSION here
→ https://barbusinesscoach.com/strategy-session

🚨 Want a stronger team and better bar culture?
Grab the free Bar Culture Workbook now
→ https://barbusinesspodcast.com

📢 Get FREE ACCESS to a group that understands the bar business
→ https://www.facebook.com/groups/barbusinessnation

🚀 Snag my book "How to Make Top-Shelf Profits in the Bar Business!"
Learn 75+ strategies to run it more profitably
→ https://barbusinesscoach.com/book/

Thank you to our show sponsors, SpotOn and Profit Assist. SpotOn's modern, cloud-based POS system allows bars to increase team productivity and provides the reporting you need to make smart financial decisions. Profit Assist works with your bookkeeping software using AI to help you make data-driven decisions and maximize your profits while giving you benchmarking data to understand how you compare to the industry at large.

**We are a SpotOn affiliate and earn commissions from the link above.

Chris Schneider 00:00  The bar industry is pushing more expensive technology solutions towards us every day, and I shouldn't really say the bar industry, the restaurant tech industry, is pushing more expensive technology solutions towards us every day. So what investments deliver the best ROI? Today, discover why the simplest technology solutions often yield the highest returns, and learn a practical framework for evaluating any technology investments that will show what works for you. Hello and welcome to the Bar Business Podcast, where we help bar owners increase profits, attract loyal guests, and simplify operations so you can avoid burnout and finally enjoy your life outside of your bar. I'm your host, Chris Schneider, the bar business coach. Before we get started, a quick thank you to our sponsors Spot On, who provide a great modern POS solution for the bar and restaurant industry in starfish. We use AI to turn your books into actionable steps to increase profits. So today we're diving into the technology investment trap that many bar owners fall into how to evaluate tech solutions based on actual ROI and the fact that simple tech investments consistently can deliver higher returns.

Chris Schneider 01:03  Now the bar industry is constantly bombarded with new technological solutions. I think we've all seen them, and it seems like not only are we bombarded with new solutions that are constantly changing and evolving, but also every solution we use is constantly getting new features and new things put towards it. But the thing is that most of the time I see people implement technology and then they're disappointed after the fact. And that's because there's a disconnect here. Now, that disconnect happens because technology decisions are typically made based on features and industry pressure, rather than looking at financial impact. The other reason that we have this huge disconnect in hospitality, and this is really, really true of hospitality tech is a lot of the folks that are making hospitality tech have no clue about the actual industry on the ground. They're building tech from a tech folk perspective, not building tech from a restaurant or bar experience perspective. They are building what they think we need and are not building what we know we want. And oftentimes that gap between what the people making the tech think that we need and what we actually want is so large that it's going to prevent the tech from actually providing you any real value.

Chris Schneider 02:18  Now, here's the good news. If you take a systematic approach to picking out your tech stack and you focus on our ROI as you look at tech adoption, you can avoid expensive mistakes in solutions that actually hurt you and invest in solutions that are actually going to improve your profitability. So first, let's discuss a little bit why I think a lot of this bar technology fails and does not deliver you in ROI like it should. And the first thing that I will say here is a lot of this tech creates more work rather than saving time, right? If you have a POS system that's too complex, it's going to require more training, more maintenance, it's more difficult to use. That may not be increasing your efficiency may be actually hindering your efficiency to bring in a new system. If your technology costs are underestimated, that's also going to hurt your ROI. Now what do I say mean when I say technology costs underestimate? Well, you probably said, well, you know, this thing costs me 120 bucks a month, or this cost me 200 bucks a month, or this cost me 300 bucks a month.

Chris Schneider 03:24  Okay, great. That's that's your cost. No, your actual cost is your implementation cost. Your staff learning curves, the training you have to provide, the materials you have to make. That's the real cost here. And all that's on top of, you know, the the simple low price of $119 a month. So make sure that when you look at implementing tech, you are considering that complexity that is not creating more time for you, and you're looking at what it's actually going to cost to get your team to be able to use it. Part of this, again, going back to the people that are selling us the tech, they're solving problems that they see based on tech, not problems that we see based upon being hospitality owners or bar owners. And so because of that, your vendors, when it comes to tech, are really going to try to push onto you a lot. Hey, here's this wonderful feature. Here's this cool factor, this thing that you should use. Isn't it cool? You've never seen something like this before, and a lot of us buy into that, right? Even I am prone to oh my God, that's really freaking cool.

Chris Schneider 04:27  But what we don't think about is, okay, you have this cool feature. Can I actually fricking use it? Does it do anything for me? Because most people. Right. If we think about software as a service, as an entire industry, part of that industry is based upon you buying things you don't use, right? When was the last time you watch Netflix? Maybe you watch it every day, but I guarantee you that probably 20% of the people listening to this podcast have a Netflix subscription and haven't watched it in a couple of months. That's kind of how SaaS companies operate. We can talk about it for better or worse. But unless you're creating a solution that's easy for you to use. It doesn't matter what the features are, because if you're not using it, you're not benefiting from it. And if you're not using it, it is just cost on your books that you don't need. You're paying for something that you're not utilizing. So you need to establish baseline metrics before you implement something.

Chris Schneider 05:18  You need to actually measure your returns. You need to see how much you use it. Otherwise, that shiny object syndrome is going to lead you to one thing that you pay for. And then you go, oh no, I didn't like that. I didn't ever use that. So I'm going to go over and buy this shiny object over here. Oh, well, that didn't work because I never actually used it. So I'm going to go buy this shiny object over here. You're just wasting money for no reason, so don't do that. So what are the highest ROI technology investments for most parts? Here's where I like to start this conversation. Every time I talk to people about it. The highest ROI in tech is when that tech does something you don't want to do or you don't know how to do. In fact, I would say if you're hiring a coach or a consultant, if you called me up and we did a strategy session And after the session, I'm saying, okay, can I help you? What? What can I do to help you out here? What makes sense as a relationship between us moving forward? Unless there's something you don't want to do or you don't know how to do.

Chris Schneider 06:13  There's no reason to hire me as a consultant. I do a lot of financial stuff, so that tends to be an area where people either don't want to or don't know how to. But your tech, you need to look at the same way. If you wouldn't hire a consultant or a person to do the work because you don't know how to do it or don't know what to do, then you shouldn't hire a piece of tech to do it because you know what you're doing, and that tech isn't really needed. But there are some types of tech generally that I think are pretty important and can be very, very helpful. First of all is basic inventory management systems. Now, I have always done an inventory for most of my clients in an Excel workbook. And guess what? That works great as long as you count properly. But the biggest problem with inventory is counting, right? And so a basic inventory management system that could look like buying margin edge extra chef market man, one of those inventory management softwares.

Chris Schneider 07:03  It could also look like and this is not necessarily a tech thing, but it could also look like hiring a company like biometrics. But they're going to come in and count all your bottles and do all that for you. Inventory. I would throw in your things I don't want to do, but something to keep in mind. And one of the reasons why I mentioned biometrics here is because they're going to come and do all that work for you. You don't want to do it. You don't have to do it. Now, if you use an inventory software, it's actually going to increase the time you spend dealing with this stuff over just using an Excel file, because you're going to have to enter it in your software. You're going to have to enter all your invoices in your software. That's all true. Now. I still think it's a great thing to do. I still think it's something you should do. But inventory management systems are right there in this whole argument of, well, I don't want to do it, so I want to use this software.

Chris Schneider 07:47  Well, the software is just going to make you do more of it. Again, doesn't mean you shouldn't do it, but be aware of that. What are some other software you should have? Well, you need something to have a customer database. Whether you're getting emails online, you know, by people filling out forms for bookings Or you're using a POS system where you're capturing emails when people are doing reservations. We're using a reservation thing like OpenTable or something to capture those emails. When you're getting reservations. You need a CRM. You need tools to capture your basic customer information, understand what you can of it. Preferably, we're going to get visit history and a lot of POS systems now can do that just by tracking credit card numbers. We don't need complex information, but we need something that's going to manage that database and we need some way to reach out to them. So something like Hootsuite, it's expensive. I don't know that you need something like that, but if you can manage that database, that email list and send out emails to your customers on a regular basis, that's great marketing.

Chris Schneider 08:43  Now this next piece of tech I am a huge fan of, which is digital scheduling tools. And I know I've talked about these before. I am a huge fan of schedule Phi, largely because I just like what will Brawley as a dude? Dude is awesome, but use some scheduling tools. It's going to reduce the amount of time you spend on scheduling. A lot of them have ways to help you make your schedule. It's also going to allow all your request offs to be in one place. You can't miss it because it got written on a post-it note that got thrown away by your assistant manager at 230 last night, and it'll allow staff to trade shifts easily and a lot. Most of those platforms also work as internal communication tools. So digital scheduling tools, that's one thing. Okay, I don't like scheduling. I know how to do it, but it's also just a pain. And I don't always know how to make all the schedules and requests and stuff fit using software. There is a perfect application.

Chris Schneider 09:37  Another piece where I think software really can be helpful is in review response and sentiment analysis. So there's a number of different softwares out there. Akira comes to mind as one that I like where they're going to do your sentiment analysis. So they're going to scrape the internet, look at Facebook, look at Google, look at Yelp, look at TripAdvisor, look at Reddit, look at all these places where people say stuff about you. And I say, well, here's the public opinion. And guess what? If they track that which these companies do. Akira again, being one of them, they're going to track that. They're going to be able to measure it and they're going to say, hey, public sentiment is going up. Public sentiment is going down. That's really important to understand. Also, tech like that can help you respond to your reviews. I don't know anything literally. I don't know a single thing more fricking annoying than responding to Google reviews. And I think you should do it. I think it should be part of your day every day to do it.

Chris Schneider 10:29  I get a new review. Oh, I did, I should respond to this. I think you should respond to every review. But this is a place where software and some I make it real easy. And yeah. Is that something you know how to do? Yes. Sentiment analysis? Probably not something you know how to do. I know how to do it from a mathematical perspective. But I'm sure you don't want to do it, because that's going to take hours for me to go through everything and try to understand where that sentiment is moving. And I have to create all sorts of complex math to do it. I can do it for us. Great. We buy the software that's handled. Review responses. I absolutely know how to do it, but I 100% don't want to do it. So if I can get a software like Akira where we're getting that sentiment analysis that I don't really know how to do, but I could. And we're doing the review responses that I don't want to do.

Chris Schneider 11:14  We are in a perfect spot. Moving on a little bit, let's talk about basic accounting software. Obviously basic accounting software is a key piece today. Restaurant 365 QuickBooks. Those are the two I'm going to say that I would use. I'm more of a fan of QuickBooks because quite frankly, it works great. It does everything that the restaurant 365 does and it's a lot cheaper. Restaurant 365 however, you're going to get a lot better dashboards, a lot better restaurant specific reports. But with restaurant 365 one thing I found over the years is sometimes it's so much data that you run out into analysis paralysis where you're just looking at so much stuff and you don't know what to do, but basic accounting software is absolutely required. And then the final thing I will say, we're seeing more of this type of software start to come up, which is simply anything that gives you better data for decision making. So we're starting to see some financial forecasting companies come out still a little wishy washy in that market. We'll see if anything changes in the next couple of months there.

Chris Schneider 12:13  But we're seeing a lot of companies say, hey, we're using AI. We're using machine learning to get you better data. Better data helps you make better decisions. I don't have any recommendations on this front yet, because with AI and everything, it's still kind of bubbling up to the surface, if you will. But pretty soon we'll know whether or not you can get better data to make better decisions and what those companies are and what that's actually going to look like. But I would definitely keep my eye out for anything like that. So let's talk about a strategic framework for evaluating your technology investments. Well, I'm going to tell you first of all start by calculating the fully loaded cost. Right. What is it going to cost you to purchase it? Depending on a POS system, some of the inventory control stuff, you're going to have hardware and software costs. So what does that hardware cost? What does that software cost? Are there any implementation costs like onboarding fees or anything like that? What's your monthly fee for that subscription fee? And then look at what's your training time and what's your ongoing maintenance going to look like.

Chris Schneider 13:15  So really try to get a holistic view of here's what this will cost me over the next 12 months. 12 months is the perfect time frame to look at. Then look at it and say, okay, this piece of software all in this is going to cost me $2,500. Great. Do you think you can get $2,500 of value out of it? What measurable outcomes? Specific measurable outcomes do you expect from that technology? Is it labor our reduction. Is it waste reduction. Is it increased check averages. Is it overall making better decisions? Is it the ability to implement lean management systems better for your business? What is that and how are you going to do it? And once you understand what your goals are and what it fully costs, you say, okay, how much do my numbers need to move in order to cover that cost? And if you do the math, then you go, well, no matter the software, I think I might be able to save myself $2,000 a year and it cost me $2,500 a year.

Chris Schneider 14:10  That's a bad deal. But if you look at it and you go, oh, this is going to cost me $2,500 a year, but I think it has the ability to increase what my bottom line is by $10,000. Okay. You're 7500 bucks a head. That's a great deal. But that's how to look at it. Actually, do the math. Measure the fully loaded cost of that software for the first year. Determine the specific measurable outcomes you can expect from it. Quantify those outcomes and actual KPIs and dollars and then say is X how much I'm spending greater or less than? Why would I expect to get out of it? And if those things are if your cost isn't lower then your benefit, you probably shouldn't do it if your cost is equal to your benefit. I would still say you probably shouldn't do it, cause you're going to spend much time doing something that isn't going to do anything for you in the long run. Now, when it comes to implementation, always implement things in stages where you can right? Start simple, use it a little bit, get that piece done, then implement a little bit more.

Chris Schneider 15:07  Now, not all technology is going to work that way for you, but if you can implement slowly, do that, have phases that helps with your training, that helps with your ROI measurement, that ensures that you're getting the full use out of the tech that you are actually paying for. If at all possible, to test your tech on a small scale before you fully implement it, right? Maybe that looks like. Oh, cool. Akira seems like a good program to use for my revenue or my review, management and sentiment analysis. And so yeah, I'm going to call them up and see, hey, can I just pay for one month? And if you guys can do that for me, that'd be awesome. Because now I can understand how I use this, how it works. And then, yeah, maybe I'm gonna go to an annual plan after that. Right. We know most software. They'll let you buy it by the month. It costs more than annual, so do it by the month for a month or two.

Chris Schneider 15:55  See how you use it. See if it works. Do it for three months. Make sure you use it before you put in that annual payment. I think I and everyone else involved in any business today. Has spent 2 or 300 bucks on a piece of tech. They expected to use a lot and then never used it. So minimize that at first to the extent that you can. And the biggest thing I will say here, the most important piece to all of this measure. Measure. Measure. Measure. Measure. Before you implement you should have specific KPIs you're looking for. Before you implement, you should have an idea of what you expect the ROI on that software to be. Then use it. And if you're not hitting those goals, if you're not hitting those KPIs, if you're not hitting that ROI, decide whether or not you're going to drop it. You have to be willing to abandon technology that isn't delivering. And this whole, you know, there's this whole sunk cost fallacy. Well, I already spent money on it, so let's let's keep using it.

Chris Schneider 16:48  If it's not working for your numbers, it's not working for your numbers. You can keep using it as much as you want, but it ain't going to help you. You're going to continue to lose money. So to wrap us up for today, we have challenged the conventional wisdom that bars need to adopt every new technology to remain competitive. Instead, we've talked through a strategic, ROI focused approach to technology adoption that can dramatically improve profitability, the highest ROI. Tech investments are also often the simplest. Basic inventory tracking like an Excel sheet. But you could do software there. Automated reordering if you have a good inventory system, some of them do that. A simple customer database sentiment analysis and review responses, financial KPIs those are the things that are going to make a difference. Those are the simple systems that will allow you to make better decisions. Those are what will help you engage your guests more. So before investing in any technology, always calculate the fully loaded cost for the year. Define those outcomes and get that ROI in your head.

Chris Schneider 17:53  And if you want to take one action towards this this week, look at the last piece of tech that you bought and think about this. Am I using it if I am using it? Is it doing what I expected it to do when I bought it. Is this costing me money or making me money? If you do that analysis with the last piece of tech you bought and you said, you know what? This is awesome. Great. You made a great decision. If you do that, unless you say, you know what? This doesn't work. What changes can you make to improve its performance? Or is it a piece of tech you don't need? Or is it just bad tech and you need to replace it with something that's the same, only different. So this week, take a look at your tech. Think about how you can drive that tech into real ROI. And most importantly, always consider anything you implement. And this is true of tech and true of everything else. Always consider the true ROI of everything you implement in your bar.

Chris Schneider 18:48  That about wraps it up for today. If you enjoy today's insights, make sure you like, subscribe and leave a review. If you are ready to take your bar to the next level, schedule a strategy session with me by clicking the link in the show notes below. Until next time, have a great day and we will talk again later.

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